Tech-focused private equity firm L Squared Capital Partners in Newport Beach has raised $840 million in its fourth fund, bringing its total fund commitments to north of $2 billion.
The firm, which specializes in investments in education technology, tech-enabled services and software, and industrial technology and services, said the fundraise received strong support from existing investors and was supplemented by several new high-quality limited partners.
They included institutions and additional large family offices, both domestically and internationally.
“Our investor base is diverse but they’re all high-quality, large family offices, institutional investors that budget for these types of commitments,” partner Randall Hunt told the Business Journal.
The company was somewhat quiet on investment targets planned for the fourth fund, though Hunt said the company will add eight to 10 new platform investments while continuing to manage the firm’s portfolio from its predecessor funds.
L Squared typically invests $30 million to $100 million in equity for companies in its portfolio, according to its website.
“Those commitments are drawn down over the life of the fund, which is typically three to four years as we go and acquire and make investments in businesses over those three to four years,” Hunt said.
Recent Investments
L Squared invests in “well run, growth-oriented businesses with high operating margins,” according to Hunt. Its target investments typically have between $15 million and $100 million in revenue, it says, with annual growth of 15% or more and EBITDA (earnings before interest, taxes, depreciation and amortization) of $3 million to $25 million.
“We have several investments in our pipeline,” Hunt said.
As an example of this year’s investments, portfolio company Raptor Scientific said in March it had acquired Woodland Hills-based King Nutronics Corp., a developer of test and measurement instruments and equipment for the defense and aviation industry.
The Raptor platform results from the prior acquisition and integration of three companies: Space Electronics, Sensor Concepts and TestVonics.
In February, L Squared said it had made a “significant growth investment” in Foundant Technologies, a Bozeman, Mont.-based provider of software tools for the philanthropic sector.
In April, the company acquired Globe Scientific, a New Jersey-based provider of laboratory consumable supplies. The purchase marked L Squared’s third acquisition as part of GSI Group Holdings, a collection of entities serving the biotech, clinical diagnostics, life sciences, education, and industrial sectors with more than $100 million in revenue.
